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CCH® PAYROLL — 3/30/12

West Virginia employers must report income of independent contractors

Effective as of June 5, 2012, West Virginia employers will be required to include contracts with independent contractors as part of new hire reporting requirements.

Employers doing business in West Virginia will be required to report to the Bureau of Child Support enforcement the contracting for services with an independent contractor when payment for services is $2,500 or more, as part of the employers’ new hire reporting requirements. Payment for services must be reported within 14 days of the earlier of first making payments that in the aggregate equal or exceed $2,500 in any year or contracts with an independent contractor providing for payments that in the aggregate equal or exceed $2,500 in any year.

New hire reporting requires employers to provide to the Bureau of Child Support Enforcement the hiring of any person who resides or works in West Virginia to whom the employer anticipates paying earnings, as well as the rehiring or return to work of any employee or independent contractor who resides in the state. Employers must submit a report within 14 days of the date of hire, rehire or return to work (or 14-16 days apart, if submitted magnetically or electronically by two monthly submissions) that includes the employee’s or independent contractor’s name, address and social security number, start date, the employer’s name and address, and any different address of the payroll office and the employer’s federal tax identification number (FEIN). Upon the written request of the Bureau, employers may also be required to provide information regarding an obligor’s employment, wages or salary, medical insurance, start date and location of employment.

For purposes of new hire reporting, “independent contractor” is defined to mean an individual who is not an employee of the employer and who receives compensation or executes a contract for services performed for that employer. A “direct seller” as defined under federal law (26 U.S.C. Sec. 3508(b)(2)) would not be included in the definition of “independent contractor.”

In addition to using such information to locate individuals for purposes of establishing, modifying and enforcing child support obligations, new hire information may also be used by the Bureau of Employment Programs and the Workers’ Compensation Commission for purposes of administering employment security and workers’ compensation programs, as well as by state agencies in determining eligibility for administering federally funded programs such as medicaid. (West Virginia H.B. 4523, L. 2012, passed March 7, 2012, and effective June 5, 2012.)

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